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Ironing out inequalities

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Using the law to iron out inequalities has profound implications, says Tony Travers.

Harriet Harman is going to consult the public about legislation that would “oblige government and councils to help those from disadvantaged backgrounds”. The proposed new law would require public services, including those provided locally, to shift resources towards the achievement of greater equality. For example, health and schools spending could be redistributed towards poorer areas.

The implications of such a policy for local government could be profound. For a start, it would be necessary to consider changes to the allocation of formula grant and schools’ grant.

Even though such funding is already skewed heavily towards poorer urban areas, the proposed new policy implies a further move of money towards relatively deprived parts of the country.

Rural and suburban councils are likely to be particularly hard hit. But even within authorities, the Harman doctrine would have significant impacts. Resources and services would, by law, have to be tilted towards poorer neighbourhoods.

During the forthcoming period of very low growth in public spending, the new policy would certainly require real cuts to the services provided in more affluent parts of a council’s area.

In cities, gentrifying areas could expect to lose money to deprived estates and left-behind neighbourhoods. The process of private sector-led regeneration, when it starts up again after the recession, might be damaged by a threat to cut back on public provision in the middle-class areas that are required to pay for s106-type goodies.

Public services would be put under even greater pressure. The expectation that schools, hospitals, social welfare and policing would be required to reduce inequality will make exceptional new demands on them.

Children reach schools from backgrounds that vary from dire poverty to extreme affluence. The backgrounds and expectations of parents vary enormously. Yet schools and other local services will be expected to deliver the equality the tax and benefit system does not.

There is also another potential consequence of Ms Harman’s policy. Those who pay the highest taxes can expect to see public services diverted away from them. Such a move would be a big change from the Blairite notion that taxpayers should be convinced their money provides them with good services in order that they would continue to be willing to pay for them.

The basic principle embraced by Ms Harman is simple enough. But it will lead to major impacts on local authorities. Resources could be redistributed between and within councils. At a time of tight spending settlements, some people might have to lose services so that others can receive them.

Councils need to work through the implications of the government’s latest bright idea and explain the consequences to Whitehall departments. The government should know what it is embarking on before it rushes to legislation.

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